Trump's social media company, Trump Media & Technology Group, threatened on Wednesday to sue the Securities and Exchange Commission over the delayed merger with SPAC Digital World Acquisition ( NASDAQ: DWAC ).
"In light of the obvious conflicts of interest among SEC officials and clear indications of political bias, TMTG is now exploring legal action against the SEC," TMTG said in a regulatory filing .
The comments come after Digital World ( DWAC ) sunk 17% on Tuesday as a deadline for financing a $1billion PIPE for the SPAC deal was set to expire. Investors in the SPAC's $1 billion PIPE financing were said to be in talks with DWAC CEO Patrick Orlando to try to get better terms that would move the risk to Trump and his backers and away from the investors, according to a Financial Times report. DWAC shares fell another 6.6% on Wednesday.
“The SEC has stalled its review of our planned merger with DWAC, having failed to act despite DWAC having filed its registration statement more than four months ago," TMTG said in the filing. "This inexcusable obstruction, which directly contradicts the SEC’s stated mission, is damaging investors and many others who are simply following the rules and trying to expand a successful business.
The TMTG statement comes as DWAC has struggled to get the necessary 65% of shareholders needed to approve the combination with Trump's media company and has adjourned a shareholder vote until Oct. 10 as it attempts to gain more votes. Only about 40% of holders have voted in favor of the transaction, according to the FT report from Saturday.
DWAC has an additional lifeline to survive after SPAC's sponsor deposited $2.88 million to extend the time company needs to complete its deal by three months until Dec. 8. This is the first of two three-month extensions under the company's governing documents. DWAC has warned previously that if the deal isn't extended, the SPAC may be forced to liquidate.
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Trump's social media company threatens to sue SEC over delayed DWAC SPAC deal